Stocks at Tekmira Pharmaceuticals (Nasdaq:TKMR) (TSX:TKM) shot up 43% to $22.59 Monday morning (January 12) after the Burnaby-based company announced it was acquiring OnCore Biopharma.
Although Tekmira is known for developing an Ebola virus treatment fast-tracked by the U.S. Food and Drug Administration (FDA) in September, the focus of the newly merged company will be on creating a cure for the hepatitis B virus (HBV).
Based on Tekmira’s Friday closing price of US$15.70, the implied market value of the new firm will be US$750 million, according to press release from Tekmira.
Shareholders of Pennsylvania-based OnCore will hold about 50% of Tekmira’s outstanding shares upon the close of the deal.
Meanwhile, Tekmira CEO Mark Murray will retain his position in the new company, which will continue to be headquartered in B.C. as OnCore operates as a wholly owned subsidiary.
OnCore chairman Vivek Ramaswamy will maintain that same role in the new company as Tekmira chairman Daniel Kisner becomes vice-chairman.
Murray said in a statement the merger has the potential to create an “HBV therapeutics powerhouse.”
Although the focus of the new company will be developing a cure for HBV, Tekmira will continue working on Ebola treatments as it’s under a US$140 million contract with the U.S. Department of Defense.
The FDA put the Ebola treatment on hold in July, meaning it could not be tested on humans during clinical trials.
The hold was partially lifted the next month before being fully lifted in September.
If approved by shareholders, the deal is expected to close within the first half of 2015.
